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For Immediate Release
Chicago, IL – June 12, 2012 - Funds in this article include: iShares MSCI Netherlands Index Fund (EWN), iShares MSCI Finland Capped Investable Market Index Fund (EFNL), iShares MSCI Austria Index Fund (EWO), and the iShares MSCI Germany Index Fund (EWG). Eric Dutram looks at three ETFs which offer exposure to strong EU countries besides Germany.
Beyond Germany: Three European ETFs Tracking Strong Countries written by Eric Dutram of Zacks Investment Research:
With the focus remaining on Europe and comments from the ECB driving the markets across the globe, many investors are reevaluating their exposure to the region. Although many are still dialing back holdings across some of the riskiest countries in the area, some intrepid and long-term focused investors are ratcheting up exposure to the strong nations in the bloc, such as Germany.
The industrial powerhouse of Europe has been under pressure as of late but many investors still think it could be a solid value. The country has one of the lowest unemployment rates in the region, a favorable trade balance, and a debt situation that appears to be in check as of now (read Germany ETFs On The Rise).
Furthermore, a weak euro actually can help Germany to an extent as it makes the country’s many quality exports cheaper on the world market making them more competitive when compared to comparable Japanese or American goods.
Thanks to these trends, German assets in the ETF world have been increasing at a solid rate from a year-to-date look, especially when comparing fund flows among European nations. In fact, EWG, the most popular German ETF, has added about $150 million in AUM this year while similar funds tracking France and Italy have both added less than $50 million in the same time frame.
Yet while this suggests some optimism regarding the German economic model, it also implies that the German funds have become an increasingly crowded trade as of late, as more dollars move into the famously strong nation. This situation has left some German assets at elevated levels suggesting that some might be better off looking beyond the country for exposure to strength in the broad euro zone region (see Three Great ETFs For Your IRA).
Unfortunately, this is becoming increasingly difficult as more nations appear to be in trouble or on the verge of issues at some point in the near future. It is not just the PIIGS but many are also starting to include the likes of Belgium and even France as potential trouble spots down the line, suggesting that choices beyond Germany are few and far between.
Still there are a few good choices left outside of Germany that investors have probably overlooked but could be great picks for the long-term. These countries, although dwarfed by the size of the German economy, still have ETF options available that can provide direct and diversified access to their economies.
Below, we highlight three European ETFs that track strong countries besides Germany, giving investors a new and hopefully less crowded way to play the in-focus space:
An often overlooked strong economy in Europe comes from the Netherlands, one of the 20 largest economies in the world. The country is one of the few to still have a golden “AAA” rating from all three of the major ratings agencies and looks well positioned in the current economic climate.
For the rest of this ETF article, please visit Zacks.com at: http://www.zacks.com/stock/news/76734/beyond-germany-three-european-etfs-tracking-strong-countries
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Contact: Eric Dutram